Florida Case Law
ROLLINS and ORKIN v. M. BUTLAND, 2D05-368 (Fla.App. 2 Dist. 12-15-2006) ROLLINS, INC., AND ORKIN EXTERMINATING COMPANY, INC., Appellants, v. MARK BUTLAND AND CHRISTINE BUTLAND, KRIS CORNETT, and MARIA GARCIA, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, Appellees. Case No. 2D05-368. District Court of Appeal of Florida, Second District, Lakeland. December 15, 2006.
Appeal from nonfinal order of the Circuit Court for
Hillsborough County; Emmett Lamar Battles, Judge.
Theodore R. Scarborough, Michael W. Davis, Constantine L.
Trela, Jr., and Robert N. Hochman of Sidley AustinBrown &
Wood LLP, Chicago, Illinois; and Douglas B. Brown of
Rumberger, Kirk & Caldwell, P.A., Orlando, for Appellants.
David M. Caldevilla of de la Parte & Gilbert, P.A., Tampa,
and J. Daniel Clark of Clark & Martino, P.A., Tampa, for
Appellees.
Mark H. Ruff of Alvarez, Sambol, Winthrop & Madson, P.A.,
Orlando, for Amicus Curiae Florida Pest Management
Association, Inc.
WALLACE, Judge.
Upon consideration of the “Appellees’ Motion For Rehearing,
Rehearing En Banc, Clarification, and/or Certification
Concerning Decision,” it is ORDERED that the Appellees’
motion for rehearing, rehearing en banc, clarification,
and/or certification concerning decision is granted to the
extent of the clarification provided. We withdraw our
previously issued opinion dated June 30, 2006, and
substitute the attached, revised opinion in its place. The
revisions consist of:
(1)In section IV: The addition of the Southern Second
Reporter citation to the citation to Wyeth, Inc. v.
Gottlieb, 930 So. 2d 635 (Fla. 3d DCA 2006).
(2)In sections V.B.1. and V.B.2.: The modification of the
language to clarify that the discussion in these sections
refers to the Appellees’ claim for damages under FDUTPA.
(3)In section V.B.1.a.: The addition of a new footnote 4
and the renumbering of subsequent footnotes.
(4)In section V.B.1.a.: The deletion of the quotation
from Macias v. HBC of Florida, Inc., 694 So. 2d 88 (Fla.
3d DCA 1997), and the addition of the quotation from
§ 501.211(2), Fla. Stat.
(5)In section V.B.1.c.(2): The deletion of the citation
to Liggett Group Inc. v. Engle, 853 So. 2d 434 (Fla. 3d
DCA 2003).
(6)In section V.B.3.d.: The addition of the Southern
Second Reporter citation to the citation to Bozeman v.
Higginbotham, 923 So. 2d 535 (Fla. 1st DCA 2006).
(7)In section V.B.4.: The addition of the full citation
and subsequent history to the citation to Liggett Group
Inc. v. Engle, 853 So. 2d 434 (Fla. 3d DCA 2003).
(8)In section V.B.4.: The addition of the phrase “for
damages” to the ninth sentence of the third paragraph.
(9)In section VI: The revision of the Conclusion to
clarify that Appellees may attempt to narrow their claims
and modify their proposed class on remand.
Mark Butland, Christine Butland, Kris Cornett, and Maria
Garcia (the Appellees) filed a class action complaint in
the circuit court against Rollins, Inc., and Orkin
Exterminating Company, Inc. (the Appellants), for multiple
claims arising from Orkin’s contractual undertakings
related to the control of subterranean termites. The
Appellees moved for class certification. The circuit court
certified a class and one subclass under Florida Rule of
Civil Procedure 1.220(b)(2) and (b)(3). On this appeal, the
Appellants challenge the order granting the Appellees’
motion for class certification.[fn1] Because we conclude
that the Appellees’ claims did not meet the requirements
for class certification under either subsection (b)(2) or
subsection (b)(3) of rule 1.220, we reverse the order
granting class certification.
I. THE APPELLEES’ CLAIMS
Each of the Appellees entered into a “Subterranean Termite
Agreement” with Orkin (the Contract). In the Contract,
Orkin agrees to treat the customer’s property for
subterranean termites in exchange for the payment of an
initial fee. Thereafter, the Contract is renewable annually
upon payment of a renewal fee. The Contract provides for
reinspections of the customer’s property “when Orkin
believes it necessary, or annually if [the customer]
request[s] it.” If an infestation of subterranean termites
is found during the term of the Contract, Orkin undertakes
to re-treat the property at no additional cost to the
customer. The Contract includes various disclaimers,
including a disclaimer of any obligation “to repair any
damage to [the customer’s] building or its contents caused
by an infestation of Subterranean Termites.” The Appellees
each claim that they sustained extensive termite damage to
their homes caused by Orkin’s deficient performance of its
obligations under the Contract.
The allegations of the Appellees’ complaint against the
Appellants are detailed and extensive. The complaint is 45
pages long and contains over 166 paragraphs. In the class
certification order, the circuit court summarized the crux
of the dispute as follows:
a. Orkin, through alleged deceptive and unfair business
practices at the control and direction of its parent,
Rollins, is alleged to have entered into Standard Termite
Contracts with the [Appellees] and the Orkin Termite Class
that are void ab initio because such contracts are
alleged to be illegal and in violation of Florida’s Pest
Control Act, chapter 482, and Florida’s Deceptive and
Unfair Trade Practices Act, Florida Statutes, chapter 501;
b. [Through] its alleged deceptive and unfair trade
practices, Orkin, at the control and direction of its
parent, Rollins, is alleged to have taken money from [the
Appellees] and the Orkin Termite Class, both through
initial payments and annual renewals, without providing
agreed upon services for inspection and treatment of
subterranean termites, most specifically annual
reinspections in exchange for customers’ annual renewal
payments; and
c. [Through] its alleged deceptive and unfair trade
practices, Orkin, again at the control and direction of
Rollins, is alleged to have disseminated to [the
Appellees] and the Orkin Termite Class standardized
advertising brochures used by its sales representatives
that are alleged to contain false and non-factual
statements in violation of Florida law.
Based on this wide-ranging dispute, the Appellees’ complaint
asserted six claims against the Appellants: deceptive and
unfair trade practices (count I); misleading advertising
(count II); Florida RICO-criminal racketeering (count III);
breach of contract (count IV); unjust enrichment (count V);
and declaratory and injunctive relief relating to the
validity of the disclaimers in the Contract under section
482.227, Florida Statutes (count VI).
In their complaint, the Appellees sought two distinct types
of damages: (1) actual damages for the payments made to
Orkin for the initial treatment fee and the annual renewal
fees by the Appellees and the putative class members and
(2) property damages incurred by the Appellees and the
putative class members as a result of damage to their
residences caused by subterranean termites. It is important
to note that membership in the proposed class was not
limited to customers who sustained damage to their
residences as a result of an infestation of subterranean
termites. For members of the putative class who had
sustained no such damage, the recovery of damages —
if any — would be limited to the first category of
damages sought.
II. THE CLASS CERTIFICATION ORDER
This is the second appearance of this matter before this
court on the issue of class certification. We reversed an
earlier order granting class certification and remanded for
further proceedings because the order did not contain the
factual and legal findings required by rule 1.220(d)(1).
Rollins, Inc. v. Butland, 852 So. 2d 895 (Fla. 2d DCA
2003). On remand, the circuit court conducted a three-day
hearing on the class certification issue. After the
hearing, the circuit court entered the class certification
order under review and a separate case management order.
The class certification order is 58 pages long and contains
over 245 paragraphs with findings of fact and conclusions
of law. The current findings of fact and conclusions of law
are sufficient to comply with the requirements of the rule.
In the order under review, the circuit court certified an
“Orkin Termite Class” and an “Orkin RICO Subclass.” The
Orkin Termite Class is defined as “all Orkin customers who
either entered into a lifetime renewable subterranean
termite contract (without an arbitration provision),
referenced herein as the ‘Standard Termite Contract’ or
renewed that contract after March 9, 1995[,] through the
present.” The Orkin RICO Subclass is defined as “all Orkin
customers who are members of the ‘Orkin Termite Class’
defined above, and were induced to and entered into a
Standard Termite Contract based on Orkin’s misleading
advertisements and representations that violate Florida
Statutes, sections 772.104, 817.06, and 817.41.”[fn2] The
circuit court certified both the Orkin Termite Class and
the Orkin RICO Subclass under rule 1.220(b)(2) and (b)(3).
The certification order directed class counsel to submit a
proposed class notice for the circuit court’s approval
within thirty days. The parties estimated the number of
members of the putative class at 65,000.
III. THE APPELLANTS’ ARGUMENTS
The Appellants challenge the class certification order on
four grounds. First, because individual issues predominate
over common issues, the putative class litigation is
unmanageable and does not meet the criteria for class
certification under rule 1.220(b)(3). Second, the named
class representatives are inadequate to represent the class
because their claims are time-barred and because they have
divergent interests from other members of the putative
class. Third, the case management order violates the
Appellants’ right to a jury trial. Fourth, the circuit
court abused its discretion by certifying classes under
rule 1.220(b)(2) that are seeking money damages. We need
address only the first and fourth grounds.
IV. THE REQUIREMENTS FOR CLASS CERTIFICATION
Before a class action can be certified, the trial court
must conduct a rigorous analysis to determine that the
elements of rule 1.220, the class action rule, have been
met. See Ortiz v. Ford Motor Co., 909 So. 2d 479, 480 (Fla.
3d DCA 2005). First, the trial court must conclude that a
plaintiff has established the prerequisites to class
representation described in rule 1.220(a). Under rule
1.220(a), the threshold requirements for class action
representation are that (1) the members of the class are so
numerous that separate joinder of each member is
impracticable, (2) the claim raises questions of law or
fact common to each member of the class, (3) the claim of
the representative party is typical of the claim of each
member of the class, and (4) the representative party can
fairly and adequately protect and represent the interests
of other members of the class. Id. “These requirements are
commonly referred to as the numerosity, commonality,
typicality, and adequacy of representation elements of
class certification.” Marco Island Civic Ass’n v. Mazzini,
805 So. 2d 928, 930 (Fla. 2d DCA 2001).
In addition to satisfying rule 1.220(a), a plaintiff must
also satisfy one of the three subdivisions of rule
1.220(b). The subdivisions relevant to this case are
contained in subsections (b)(2) and (b)(3). Rule
1.220(b)(2) requires that the party opposing the class has
acted or refused to act on grounds applicable to all class
members, thereby making final injunctive or declaratory
relief appropriate. Rule 1.220(b)(3) requires that common
questions of law or fact predominate over any individual
questions of the separate members and the class action must
be superior to other available methods for a fair and
efficient adjudication of the controversy. The rule
1.220(b)(3) requirement parallels the commonality
requirement under rule 1.220(a) because both require that
common questions exist, but the predominance requirement in
subsection (b)(3) “is more stringent since common questions
must pervade.” Wyeth, Inc. v. Gottlieb, 930 So. 2d 635, 639
(Fla. 3d DCA 2006).
The party moving to certify the class has the burden of
proving the propriety of class action status. See Marco
Island, 805 So. 2d at 930. There must be an evidentiary
basis to support an order certifying a class when the
nonmoving party contests class certification and it is not
clear from the pleadings that a lawsuit qualifies for class
action status. See Ernie Haire Ford, Inc. v. Gilley, 903
So. 2d 956, 959 (Fla. 2d DCA 2005). Although a trial court
will generally be required to conduct an evidentiary
hearing to determine whether to certify a class, the trial
court’s proper focus is on whether the requirements of rule
1.220 have been met and not on whether the moving party will
prevail on the merits. See Samples v. Hernando Taxpayers
Ass’n, 682 So. 2d 184, 185 (Fla. 5th DCA 1996) (citing
Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974)).[fn3]
A “determination that a case meets the requirements of a
class action is . . . within the trial court’s discretion
and will be reversed on appeal only if an abuse of
discretion is shown.” Bouchard Transp. Co. v. Updegraff,
807 So. 2d 768, 771 (Fla. 2d DCA 2002) (citing Marco
Island, 805 So. 2d 928).
V. DISCUSSION
A. Introduction
The circuit court certified the Orkin Termite Class and the
Orkin RICO Subclass under both rule 1.220(b)(2) and (b)(3)
on all six of the claims alleged in the Appellees’
complaint. However, only the claim asserted in Count VI
— which seeks declaratory and injunctive relief
— is a candidate for certification under rule
1.220(b)(2). The remaining claims all seek money damages
and should be evaluated for certification under rule
1.220(b)(3). In the discussion which follows, we will first
consider the claims asserted in counts I through V under
rule 1.220(b)(3) and then consider the claim asserted in
count VI under rule 1.220(b)(2).
B.Certification Under Rule 1.220(b)(3)
1.Deceptive and Unfair Trade Practices (Count I)
a.The Elements of a Claim for Damages Under FDUTPA
In count I of their complaint, the Appellees assert a claim
for damages against the Appellants under Florida’s
Deceptive and Unfair Trade Practices Act (FDUTPA), sections
501.201-.213, Florida Statutes.[fn4] FDUTPA is
intended to “protect the consuming public and legitimate
business enterprises from those who engage in unfair
methods of competition, or unconscionable, deceptive, or
unfair acts or practices in the conduct of any trade or
commerce.” § 501.202(2). See also Delgado v. J.W.
Courtesy Pontiac GMC-Truck, Inc., 693 So. 2d 602, 605-06
(Fla. 2d DCA 1997) (discussing the purpose of FDUTPA in
light of its legislative history). A deceptive practice is
one that is “likely to mislead” consumers. Davis v.
Powertel, Inc., 776 So. 2d 971, 974 (Fla. 1st DCA 2000). An
unfair practice is “one that ‘offends established public
policy’ and one that is ‘immoral, unethical, oppressive,
unscrupulous or substantially injurious to consumers.’ ”
Samuels v. King Motor Co. of Fort Lauderdale, 782 So. 2d
489, 499 (Fla. 4th DCA 2001) (quoting Spiegel, Inc. v. Fed.
Trade Comm’n, 540 F.2d 287, 293 (7th Cir. 1976)).
FDUTPA affords civil private causes of action for both
declaratory and injunctive relief and for damages. With
respect to the recovery of damages, FDUTPA provides:
In any action brought by a person who has suffered a loss
as a result of a violation of this part, such person may
recover actual damages, plus attorney’s fees and court
costs as provided in s. 501.2105. However, damages, fees,
or costs are not recoverable under this section against a
retailer who has, in good faith, engaged in the
dissemination of claims of a manufacturer or wholesaler
without actual knowledge that it violated this part.
§ 501.211(2). Thus a consumer claim for damages under
FDUTPA has three elements: (1) a deceptive act or unfair
practice; (2) causation; and (3) actual damages. See
Chicken Unlimited, Inc. v. Bockover, 374 So. 2d 96, 97
(Fla. 2d DCA 1979); Gen. Motors Acceptance Corp. v.
Laesser, 718 So. 2d 276, 277 (Fla. 4th DCA 1998); Macias v.
HBC of Fla., Inc., 694 So. 2d 88, 90 (Fla. 3d DCA 1997).
The standard for determining the actual damages recoverable
under FDUTPA is well-defined in the case law:
“[T]he measure of actual damages is the difference in the
market value of the product or service in the condition in
which it was delivered and its market value in the
condition in which it should have been delivered
according to the contract of the parties. [. . .] A
notable exception to the rule may exist when the product
is rendered valueless as a result of the defect —
then the purchase price is the appropriate measure of
actual damages.”
Rollins, Inc. v. Heller, 454 So. 2d 580, 585 (Fla. 3d DCA
1984) (quoting from Raye v. Fred Oakley Motors, Inc., 646
S.W.2d 288, 290 (Tex.App. 1983)).
For purposes of recovery under FDUTPA, “actual damages” do
not include consequential damages. See Fort Lauderdale
Lincoln Mercury, Inc. v. Corgnati, 715 So. 2d 311, 314
(Fla. 4th DCA 1998). FDUTPA’s bar on the recovery of
consequential damages precludes the recovery of the costs
to repair a building resulting from a deficient inspection
for termites. See Orkin Exterminating Co. v. Petsch, 872
So. 2d 259, 263 (Fla. 2d DCA 2004); Urling v. Helms
Exterminators, Inc., 468 So. 2d 451, 454 (Fla. 1st DCA
1985). Similarly, the recovery afforded under FDUTPA does
not include diminution in value or stigma damages caused by
termite damage. See Orkin Exterminating Co. v. DelGuidice,
790 So. 2d 1158, 1162 (Fla. 5th DCA 2001).
b.The Appellees’ FDUTPA Damages Claim
The scope of the Appellees’ claim for damages under FDUTPA
against the Appellants is extremely ambitious. The
Appellees do not base their FDUTPA damages claim on a
single act or practice. Instead, they allege that the
Appellants have committed no less than fourteen separate
deceptive or unfair practices. The Appellees’ allegations
against the Appellants on the FDUTPA damages claim may be
summarized as follows:
- The various disclaimers in the Contract were not
in conspicuous type on the face of the contract and
improperly attempted to limit the termite protection
guarantee, all in violation of section 482.227(2), Florida
Statutes. - The Appellants falsified reinspection documents
and forged reinspection tickets and other treatment
records. - The Appellants failed to disclose termite
infestation to customers. - The Appellants engaged in false and misleading
advertising. - The Appellants failed to inspect customers’
homes and falsified the company records to indicate that
inspections had been performed when they had not. - The Appellants misused the word “guarantee” in
the Contract in violation of section 482.227(1), Florida
Statutes.
The circuit court devoted most of its attention in the
certification order to the allegations concerning the
various disclaimers in the Contract. Nevertheless, the
circuit court certified the class based on all fourteen of
the separate alleged violations. Thus we must consider
whether certification was appropriate based on all of the
alleged violations, not just those relating to the
disclaimers.
c.Predominance Analysis
(1)The Applicable Test for Assessing Predominance
Our initial task in reviewing the Appellants’ challenge to
class certification on the FDUTPA damages claim under rule
1.220(b)(3) is to determine if common questions predominate
over individual questions with respect to the matters to be
proved at trial. In approaching this task, we are guided by
this court’s decision in Humana, Inc. v. Castillo, 728 So.
2d 261, 266 (Fla. 2d DCA 1999), where we said:
To certify a class, rule 1.220(b) requires not only that
common questions exist, but that those common questions
predominate over individual questions. Rule 1.220 also
requires a class action to be manageable and superior to
other proceedings. To determine if the requirements of
Rule 1.220 have been met, a trial court must envision how
a class action trial would proceed.
Under this analysis, the trial court must determine
whether the purported class representatives can prove
their own individual cases and, by so doing, necessarily
prove the cases for each one of the thousands of other
members of the class. If they cannot, a class should not
be certified.
If individual questions predominate, a class action is
unmanageable. Id.
Our analysis of the predominance question is necessarily
based on the elements of the Appellees’ FDUTPA damages
claim. See Latman v. Costa Cruise Lines, N.V., 758 So. 2d
699, 702 (Fla. 3d DCA 2000). To promote clarity in our
analysis, we will first address this issue in the context
of the proposed proof of deceptive acts and unfair practices
and then address the same issue as it relates to the
proposed proof of causation and damages.
(2)The Proposed Proof of Deceptive Acts and Unfair
Practices
We begin our examination of the certification of the FDUTPA
damages claim with the proposed proof of deceptive acts and
unfair practices — the first leg of the FDUTPA
liability tripod. In the circuit court’s analysis of the
predominance question, it devoted most of its attention to
the issues of Orkin’s alleged misuse of the word
“guarantee” and the validity of the various disclaimers in
the Contract. Because these issues concern questions of law
arising from the terms of the Contract, they are arguably
common to all members of the putative class. However, the
Appellees’ FDUTPA damages claim is not limited to legal
issues arising from the terms of the Contract. On the
contrary, the FDUTPA damages claim addresses numerous
issues relating to the Appellants’ alleged misdeeds in
inducing customers to choose Orkin for pest control
services and in the performance or nonperformance of those
services for individual customers.
A review of the fourteen separate violations of FDUTPA
alleged in the complaint demonstrates that the Appellees
cannot — by proving their own cases — prove
the cases for each of the thousands of other members of the
putative class as required by Humana. For example, proof
that Orkin failed to inspect the Butlands’ home and
falsified company records to indicate that the inspections
had been performed would not prove that Orkin had failed to
inspect the home of any other member of the putative class.
Proof that Orkin forged Kris Cornett’s name to a
reinspection ticket would not prove the forgery of the name
of any other class member to a reinspection ticket. And
proof that Orkin failed to disclose a termite infestation
to Maria Garcia would not prove that Orkin discovered and
failed to disclose a termite infestation in the home of any
other member of the putative class. In short, the
adjudication of the Appellees’ FDUTPA damages claim would
require multiple factual determinations that are unique to
each member of the class. The need to resolve these
multiple individual factual issues overwhelms any common
legal issues relating to the provisions of the Contract.
Because individual questions predominate, the Appellees’
FDUTPA damages claim is unmanageable as a class action. See
Humana, 728 So. 2d at 266; St. Joe Co. v. Leslie, 912 So.
2d 21, 24 (Fla. 1st DCA 2005); Terry L. Braun, P.A. v.
Campbell, 827 So. 2d 261, 265 (Fla. 5th DCA 2002).
(3)The Proposed Proof of Causation and Damages
We turn now to an examination of the predominance issue in
the context of the second and third legs of the FDUTPA
liability tripod-causation and damages. In the
certification order, the circuit court ignored the element
of causation and treated the element of damages in a
cursory fashion as follows:
227. . . . [I]n the present case, many damages issues can
be handled on a class-wide basis.
228. For example, [the Appellees] contend, and the Court
finds based on the evidence submitted to date, that [the
Appellants] have all the information necessary to
establish total damages in their financial records,
showing the amount of money received both initially and
annually from payments of renewal premiums. . . .
229. Thus, the recovery for the class as a whole will be
fixed through common proof. Thereafter, the calculation of
sums due to individual class members can be determined
using techniques employed in other large class actions,
such as questionnaires or proofs of claims. In such
circumstances, once the total recovery is fixed, the need
for individual mini-trials or any further defense
involvement is eliminated.
Thus the circuit court concluded that the amount of damages
due to each member of the putative class could be
determined by calculating the total amount paid by each
customer to Orkin for the initial treatment and each annual
renewal of the Contract. The circuit court seems to have
been of the view that upon proof by the Appellees that the
Appellants had committed deceptive acts or unfair
practices, each putative class member would be entitled to
a damages award measured by a refund of all monies he or
she had previously paid to Orkin.
In their brief filed in this court, the Appellees urge a
slightly different approach to the issues of causation and
damages. The Appellees’ theory of causation and damages
focuses on the “diminished market value” of the putative
class members’ individual contracts with Orkin. The
Appellees’ argument on this point is as follows:
[I]t is not necessary for [the Appellees] to prove that
every class member did not receive an annual reinspection
or some other form of services they paid for, or that
every class member relied on false advertising. Rather,
[the Appellees] merely need to demonstrate that as a
result of these common schemes and business practices, the
contracts have diminished market value. . . .
Proof of such pervasive schemes will also establish [the
Appellants] have violated, are violating, and/or are
otherwise likely to violate FDUTPA…
. . . .